Adroit Market Research - Industry Insights

Specialty coffee is an advanced approach of coffee which is driven by conscious ethics across the globe. Just similar as wine, specialty coffee has some point system to measure the quality of the coffee such as things like aroma, body, taste, and acidity all such things used to measure out a score of the all good qualities of the given coffee.

As per the research of Specialty Coffee Association of America, the coffee which had scores of around 80 out of 100 score then that coffee is measured as “specialty coffee.” However, specialty coffee is largely grown up in the three regions such as Africa, Central & South America, and Asia.

Case Study:

Indonesia region is one of the top exporters of coffee beans. However, the coffee export from Indonesia is not as well actually recognized as Colombian and Brazilian coffee. The main reason is that the country exports only a limited quantity of Arabica coffee. However, this coffee is retailed and roasted similar to regular coffee in the number of importing countries. Near around 87% of the coffee is exported from only Indonesia is Robusta. However, Robusta is basically used as a raw material in the several foods processing industry. Therefore, adding value for the exporting crops is one of the major challenges facing Indonesia.

P.T. Toarco Jaya is one of the largest Japanese companies which have been situated in the Tana Toraja, South Sulawesi from the year of 1976. By using Arabica coffee from farmers, the company found a fresh brand of specialty coffee which named as ‘Toarco Toraja’. Coffee crops which can produce a better quality of coffee are developed in the hilly area in which people use to travel on horseback or on foot. The company mainly looks into two measures, first is developing purchasing places nearer to the farmers and the second one is making better utilization of local collectors. However, collectors play the number of roles to farmers which include purchasing coffee beans from the several farmers, offering credits, transporting coffee to Toarco, as well as managing coffee quality. However, no other organization can play all these roles.

When the company began procurement from farmers, Toarco faced the huge number of challenges such as growing number of coffee producers, growing awareness among collectors and farmers for quality control, spreading knowledge of harvest processing, and improving farmers’ production skill. To overcome these challenges, The Company took the number of measures such as organizing sessions for improving post-harvest processing skills of farmers, free distribution of seedlings, increasing the inspection system, and buying the high-quality coffee with fine prices.

P. T. Toarco Jaya is currently exporting near around 200-300 tons of coffee bean each year. The company benefiting more than 7,000 small and medium scale farmers as providers as well as offering about 900 temporary and 53 full-time jobs in their Rainforest Alliances certified farm. Currently, Arabica coffee is one of the reliable income sources of farmers, and Sulawesi is one of the well-known states for high specialty coffee production.

Coffee Beans Procurement from Farmers

Currently, the company is running with 4 coffee purchasing stations in the coffee-producing area and 1 in Rantepao of Tana Toraja district. However, Toarco buys coffee from a huge number of registered collectors and farmers. The overall amount of measures of around 80% for company procurement. However, 20% is generated from the Padamaran plantation.

While farmers sell coffee to buyers, it may have three forms of coffee, such as:

• Parchments

• Coffee Cherries

• Green Beans

When the company was begun to buy coffee from farmers, it was in the above-mentioned forms. However, Toarco set some fine prices which impact market grades as well as prices. Thus, Cherries were graded on the basis of three types by seizes and ripeness. While green beans and parchments were graded on the basis of the degree of wash as well as dry, impurity, aroma, and size. In the primary step of the business, the company preferred to buy cherries as they could find out unripe cherries. So, they can manage the post-harvesting process and store.

Today, the company buys majorly green beans and parchments from collectors and farmers. With the help of training sessions, farmers improved their skills and knowledge regarding post-harvesting processing as well as they know the Toarco standards like the degree of dry. This improves benefits for both farmers and Toarco.

Conclusion

The above-mentioned case study states that farmers in Toraja are growing with Arabica coffee for regional consumption. The marketing and production were not rationalized. However, farmers lacked knowledge and skills regarding post-harvest processing and coffee trees. In addition, now the quality of coffee beans is better and the production of coffee is also increased.